UNIONDALE, N.Y. — In the spirit of the “little train that could,” Del Laboratories stealthily chugged over the rough terrain of 2001, building up enough steam along the way to leave Revlon nail polish in the dust.

As William McMenemy, Del’s soft-spoken executive vice president of marketing, put it: “It was probably our best year in 10 years.” After some more thought, he added: “It was probably the best year ever.”

McMenemy would know, he’s been with Del for 36 years. His counterpart in sales, Harvey Alstodt, has been at Del for 17 years. Dan K. Wassong, chairman and chief executive officer and its largest shareholder, has also been at Del for 36 years. “We have always brought people in from the outside,” noted McMenemy, “but the consistency has helped with our success.”

Del’s beauty sales for the first nine months of 2001 grew 12.9 percent over the same period the previous year, from $172.3 million to $194.6 million. (Fourth-quarter and yearend numbers have not been released yet.) Its beauty portfolio includes Sally Hansen, Naturistics, NYC New York Color, Corn Silk and La Cross.

Del started life as Maradel. It was founded by Martin Revson, the brother of Revlon founder Charles Revson, who bought up small beauty brands, starting with Sally Hansen and La Cross, and put them under one umbrella. Although Del has maintained a steady presence in mass beauty, its contributions have been overshadowed by the dominant franchises like Revlon, Cover Girl and L’Oreal. But its getting harder and harder not to pay attention to the midsized Long Island company.

Last year, Del grew in the nail color category when most every other company did not. According to ACNielsen, for the year ended Sept. 22, 2001, Sally Hansen polish grew 37.9 percent to claim 20.6 share of the enamel market. During the same period, Revlon’s sales fell 5.1 percent for a 17.8 share. The next closest competitor was Maybelline, whose sales slipped 1.8 percent for a 13.8 share. Looking at the total nail care category, which includes enamel, treatment, artificial nails and removers and implements, Sally Hansen claimed a 21.7 share for the third quarter, up 18.3 percent. Revlon, the number two player, had a 15.5 share with sales falling 2.1 percent. “We are the only supplier of all elements that make up nail care,” noted Alstodt.

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It was under Sally Hansen that Del unveiled the category’s first chrome polish with Chrome Nail Makeup. The demand was so immediate that stores sold out and the hard-to-find bottles were being auctioned on eBay. Chrome gave Del a jump-start in its ascent in the nail polish category. It got the final boost needed to become the category leader from the introduction of Maximum Growth nail color, a product that nourishes nails and encourages growth. In September, Sally Hansen displaced Revlon as the nation’s top nail enamel vendor.

The company also has been building Sally Hansen, its largest brand, into a treatment franchise with foot care and the recent additions of hand care and lip treatment items. According to McMenemy, many drugstore chains have been expanding space for Sally Hansen, which has enabled Del to “solidify Sally Hansen as a family of products.” The lip items launched last fall include Lipcolor Sealer, Lip Grip Plumper, Lip Quencher lipstick, Daily Lip Moisturizer and Lip Quencher Soothing Lip Balm. They are described by McMenemy as “treatment products with beauty benefits.” The hand collection contains No-Heat Paraffin hand smoother, Age Correct retinol hand creme, 18 Hour Protective hand creme and Hands, Nails & Cuticles creme.

To better leverage the Sally Hansen concept, Del has created a new merchandising system that houses all items together as a family of products. Alstodt says the Sally Hansen treatment items form a backbone for the category and that “keeps them [customers] loyal.”

NYC New York Color, which entered the market in 1998, also has been a growth area for Del. The budget line quickly found favor with consumers and its door count grew 40 percent last year, to 14,000 doors, and U.S. sales doubled to about $60 million retail. In Canada, NYC now represents about a $20 million retail business. Del hopes the brand will grow to about $100 million this year. NYC is building up its pricing a little by adding some items with $3.99 and $4.99 tags. Borrowing from Cover Girl’s Outlast, NYC is introducing Lip Forever, a long-wear lipcolor with a clear top coat for $3.99 a tube. NYC also is adding “all-in-one” kits. One, called On Location, contains lip glosses, eye shadows, blush and a mirror and applicators for $4.99.

La Cross nail implements, a high-margin category, also has been gaining. Del execs say sales are up about 18 percent over the previous year. With the La Cross artificial nail business, the emphasis has been on adding ingredients to make it as healthy as possible.

Meanwhile, Naturistics and Corn Silk have been holding steady as Del reworks both brands.

Naturistics, which started out as an environmentally friendly bath line, has been made over into a teen cosmetics brand. The second phase of the relaunch comes this year with the introduction of new packaging, designed with the help of teen focus groups. New items, including chrome liquid eyeliner and chrome eyeliner pencils and eye shadow, are rolling out in February. Putting chrome in those items “has never been done before,” said McMenemy. “It took about a year for us to formulate.” Notes Alstodt, “We are looking for big things [from Naturistics].” Already, CVS had doubled its distribution of Naturistics.

“We are changing the face of the brand, as well as adding new products,” added McMenemy. Del tapped some 500 teenage girls to help create the packaging, which resulted in bottles with polkadots and novelty shapes for lip gloss compacts, along with the use of hot pink and lime green on the outer packaging. Del plans to get the Naturistics name out through various sponsorships and contest events. In a promotion with CVS tied into the N.Y. Power soccer team, the winner will have the opportunity to do color commentary at a Power game.

Corn Silk sales have been stable but are expected to be sparked this year with new face brightening pressed and loose powders. Del executives promise more new items will be added next year as the brand is expanded into new, but complementary categories. Explaining Del’s philosophy, Alstodt said: “We went through the category and basically created a point of difference and a reason for being for each product.”

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